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There was a hidden issue in last week’s Bumblebee Tuna recall. It had nothing to do with food safety and everything to do with consumer empowerment. And you had to pay close attention to the facts to see it.

The conclusion? Bumblebee’s tuna recall makes a deafening case for why you should ignore branding. Completely.

Here’s why: Bumblebee was using a third-party canning company named Tri-Union Seafoods to produce their product. In addition, Tri-Union Seafoods was also making canned tuna for Chicken of the Sea. As we know, the tuna recall affected both brands.

What this means, then, is tuna labeled under both brands was processed and canned through the same machines at the same manufacturing facility. It’s also highly likely that Tri-Union makes canned tuna for other companies, including many store brands or generic brands in what’s called “private label manufacturing.”

The stuff is all made at the same facility. And none of it is actually made by the companies that own the brands!

And yet it’s sold to you on your grocery store shelves under various labels from various companies at prices varying by thirty, forty, even fifty percent.

Canned tuna, therefore, is now outed as yet another undifferentiated commodity product, branded, labeled and sold as faux-differentiated to consumers. We can now clearly see there is essentially zero difference between Bumblebee, Chicken of the Sea and any equivalent store brand.

If you still need more proof that branded consumer products are almost never worth a premium price, I can’t help you. I simply cannot help you.

This should change everything about how you perceive brands. When a paper label and a 40% higher price is the only difference between one product and another, why not embrace brand disloyalty? Shouldn’t you be rightly suspicious of paying extra... for no reason whatsoever?

Said even more strongly, you can confidently dismiss the branding, the premium pricing, or any of the various quality signals consumer products companies try to use to extract higher prices from you. You can dismiss all of it, and simply buy whichever product is on sale or costs the least on the day you happen to be shopping. In almost all cases, you’ll get a product of equivalent, if not identical, quality.

The central concept here, the idea I really want readers to bring home with them, is this: Across most consumer product categories, the generic product and various branded products sitting right next to each other on your store shelves are often made by the same third-party manufacturer. Many expensive branded products aren’t even made by the company that owns the brand. And it is becoming more and more common throughout the consumer products industry for well-known household brands to contract out practically their entire business to third-party manufacturers. [See here for more on this, and the story of one food company that embraced this strategy early on.]

Which means the brand, the label, and the premium pricing strategy are nothing more than fetishes for quality. They are cognitive shorthand. They influence us into falsely presuming the product is of higher quality, and that it’s therefore worth a significantly higher price.

Finally, please keep in mind: now that more and more companies have converted to third-party manufacturing, and as it becomes more and more painfully obvious to consumers they’ve done so, this strategy becomes all the more naked.

We consumers are following labels and fetishes, and we’re not receiving fair value in return. Do not mindlessly submit to brand-based purchasing.

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4 comments:

Anonymous
said...

I have put in my time in a retail establishment (Large Grocery store) & found out in the training that the store did make its own ice cream, but did not make its own health & beauty aids aka HBA's like aspirin, nor did it make batteries and the like that also had the store brand on it, so you can use that tid-bit to extrapolate the information in this post.

Isn't it still likely that they use the nicest tuna for the brand names, and everything else gets thrown into generic labels? I've definitely noticed a difference in quality between, say, the "mid range" chunk light tuna from Wegmans, which has noticeable chunks, and the low-end chunk light tuna from Aldi, which is more like tuna mush. (We still buy it from Aldi, since we just mush it up with mayo anyway.)

Karin, I would look at it this way: the brand names will clearly want you to *think* they use the nicest tuna. It's up to us, as empowered consumers, to actually test the assumption and see if their tuna is better, rather than just passively assuming it and paying extra for no reason.

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